There is always a way...

[Mackal Smith]

I started real estate investing later in life than most I suppose. At 55 I decided I needed to diversify investments and had always wanted to invest in real estate. Starting at this age provided me some distinct advantages:

• I have built up great credit over the last 35 years or so
• I have a large number of stock investments in both 401K and in general investments that have done really well for me over the years
• I have had enough success in the workforce that I'm really not afraid to take on new challenges. I walk into everything with a lot of confidence

So a little over a year later and I have acquired 13 units. I'm very happy but this year my CPA told me that I had to quit cashing in stock for down payments on properties or I would end up in the absolute highest tax bracket because of the capital gains.

I posted my dilemma on BP and received some really great advice. I could continue to invest without having to cash in stock in a number of ways: Partner up with someone that had cash on hand but was unable to borrow, continue to cash in the stock and take the hit (some really smart guys pointed out that the RE investments would actually overcome the the tax hit in about 4 years anyway), or the last suggestion which is what I'm doing now... Look into lines of credit.

Long story short, I paid cash for one property a year ago and now I'm using it as collateral on a line of credit (closing today), then a second line of credit will come from a national bank who will hold my stock as collateral and issue a credit line against it. 

Now, I can use these 2 credit lines to buy distressed properties for cash. Then I can pay cash for the repairs/rehab and at the end, come out with built in equity. The same banks that are giving me the credit lines will do commercial loans for 75% LTV which means i can now refinance and completely pay back my lines of credit. That puts me into the properties with no (or at least very low) money down and keep all my stock.

Thanks BP! Thanks for all the great people with great ideas willing to share!